Genmin receives US$10m royalty payment from first sale of Baniaka iron ore product
Genmin chief executive officer Joe Ariti says Anglo American is an “ideal partner” to assist in advancing Gabon to first production and beyond.
African iron ore explorer and developer Genmin (ASX: GEN) has received a US$10 million royalty payment from Anglo American Marketing in relation to its Baniaka iron ore project located in Gabon.
Earlier this month, Genmin announced that wholly-owned subsidiary Gabon Iron Ore had entered into a 1% royalty agreement with Anglo, which is owned by global mining major Anglo American plc.
The pre-payment was made based on Anglo’s expected royalty revenue from the sale of the first 75 million tonnes of iron ore produced and sold from Baniaka.
Platts Iron Ore Index was used to determine the anticipated price.
Genmin has also granted Anglo an exclusive right to negotiate and agree terms for up to US$75 million in project funding and up to 100% of offtake from Baniaka.
The exclusive right commences on delivery of the Baniaka preliminary feasibility study by the end of the September quarter and will be for a period of 120 days.
Ideal partner
On signing the royalty agreement, Genmin chief executive officer Joe Ariti said he was pleased to be dealing with a mining company of Anglo’s stature.
“We regard Anglo as an ideal potential partner for us in achieving our goal of pioneering iron ore production in Gabon in a sustainable way, given Anglo’s heritage in Africa, and commitment to sustainable operations and activities as an iron ore producer and marketer,” he said.
“This agreement supports our near-term production aspirations and the potential bespoke funding with offtake provides alignment between for the pursuit of scale.”
Global resource growth
In May, Genmin announced the global mineral resource for the Baniaka project had grown by 168% to 700 million tonnes grading 40% iron.
The growth was enabled by a maiden resource at the Bandjougoy prospect of 436Mt contained iron ore grading 34.8% iron.
It elevated the project to become the largest resource in Gabon across all commodities.
Baniaka covers 881 square kilometres of ground in southeast Gabon and hosts 12 major prospects.
A pre-feasibility study is underway to evaluate a bulk open pit mining operation which would produce about 5Mt per annum of iron ore products and a possible expansion to 10Mtpa.